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Games

Video Game Sales Set To Fall For First Time in Years as Industry Braces For Recession (cnbc.com) 45

Posted by msmash from the closer-look dept.
Video game sales are set to decline annually for the first time in years, as another industry that boomed in the coronavirus era faces the grim prospect of a recession. From a report: The global games and services market is forecast to contract 1.2% year-on-year to $188 billion in 2022, according to research from market data firm Ampere Analysis. The sector expanded 26% from 2019 to 2021, reaching a record $191 billion in size. Sales of video games have consistently grown since at least 2015, Ampere data shows.

Gaming got a huge boost from Covid-19 shutdowns in 2020 as people spent more of their time indoors. The launch of next-generation consoles from Microsoft and Sony that same year also bolstered the industry's fortunes. However, the arrival of Microsoft's Xbox Series X and S machines and Sony's PlayStation 5 proved something of a double-edged sword -- logistics disruptions and shortages of vital components have meant that shoppers are facing great difficulty finding any of the new consoles on store shelves or online.
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Video Game Sales Set To Fall For First Time in Years as Industry Braces For Recession More

Video Game Sales Set To Fall For First Time in Years as Industry Braces For Recession

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  • Nothing to do with the £70-£100 price (Score:4, Insightful)

    by Computershack ( 1143409 ) on Thursday July 07, 2022 @12:16PM (#62681406)
    They're pricing themselves out of sales with the ridiculous price tags they're now applying to next-gen console games along with the fact that nowadays not only are they just releasing what is effectively a map update as a new game, they're having the audacity to release several year old games as re-masters and giving them a massively inflated price tag as well.

    • Re: (Score:2)

      by splutty ( 43475 )

      To be fair, when I started with games (*cough*80's*cough*) they were far more expensive than that.

      But there's also a lot more choice nowadays, plus a lot of the AAA companies have proven without a doubt in the last 2 years or so that what they make is.. Just not good anymore.

      The in-game monetization, the unfinished games, the buggy mess that shouldn't even be in beta, etc, etc, all play a role.

      And of course, don't forget that most people are no longer at home most of the time, and are losing a lot of time o

      • I remember buying Wizardry: Bane of the Cosmic Forge on 5.25" floppies for my Tandy 1000 back in...I don't know, late 80s, early 90s, and it was $59.99.

    • Re: (Score:3)

      by Z80a ( 971949 )

      The strategy they're using is to price it that high for the people that just don't have any sort of self control, then do the rest of the sales with hefty discounts down the line.

    • My dad bought me an Atari 2600 in 1978 for $250. With inflation, $250 is $1200 in 2022. I saved up for games that cost $30... equivalent to $140 in 2022. Consoles are cheap. Games are cheap... and so much better than the games from 1978. "Free" to play is where the big money is now, if players are foolish enough to get involved with that.
    • NES carts were like 80 bucks, and that was in 80's foldin' money.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      It's not the price point - after all, I remember having to beg for Nintendo games.

      It's the fact that ... well, the games coming out aren't appealing.

      I've only bought 1 PS5 game since I got the PS5. And no, I've not bought any PS4 games since then either.

      I've bought a few Xbox games, Halo Infinite, but that's about it.

      The only game I'm looking forward to is the new God of War game.

      Other than that, I'm just waiting on sales of games already out - like Life is Strange True Colors.

      All the other games I've gotte

    • As has been stated before here, adjusted for inflation, games are actually cheap. Cheaper than they used to be. The price tag for a game hovered around the 50 bucks mark for decades. Not exaggerating here. But that worked out for quite a while. Games cost about 50 bucks in the 1990s. And games are nearly 100% fixed cost with very low per-unit costs. In other words, if you can sell more units, you essentially increase the contribution margin by almost the asking price. Since gaming gained popularity in the 9

      • (sorry that I answer myself, but posted together, it "looks too much like ascii art". /., seriously, get your ascii art filter checked, because it obviously fails to identify ascii art, in both cases, in false-positives and false-negatives)

        And all this also contributed to another problem the game industry is suffering from today: AAA-copycatism. Where AAA games are so insanely expensive to make that they cannot take the slightest risk. Where every game in a franchise has to be essentially the same game as t

        • So what can they do?

          My solution was quite simple: I quit AAA gaming. First, I am not inclined to pay annually for the same game. I frankly don't see the difference in the various "EA-Game-Name year" verisons. And the main difference between the various Call of Battlefield versions is the war they pretend to be in, which in turn means mostly whether the guns are single or auto fire and whether they make the "bangbang" of bullets or "zipzip" of lasers. That's the big difference here. But you have to buy them,

  • Not just BAU? (Score:2, Insightful)

    by Anonymous Coward

    They even state in the article it expanded 26% during covid due to people spending more time at home. Now that all that has been over for a while they freak out about a 1.2% contraction? This sounds like an overall win to me but financial people always gonna freak out over "where's ma growth!!!!" even though the previous growth was due to unforeseen circumstances

    Dumb article is dumb

  • Video game sales are set to decline annually for the first time in years, as another industry that boomed in the coronavirus era faces the grim prospect of a recession.

    Recession! First decline in years! This sounds really bad!

    ...forecast to contract 1.2% year-on-year in 2022... The sector expanded 26% from 2019 to 2021... Sales of video games have consistently grown since at least 2015

    Oh, so after 2 years of unrepeatable double-digit growth, it is leveling off to somewhat normal sales. And the last decli

    • Re: (Score:2)

      by Junta ( 36770 )

      Basically the mood in the news is to milk recession panic.

      Which is unfortunate, as the quickest way to get into a recession is for everyone to scream we are in a recession. If by some chance we wouldn't have otherwise gone into a recession, the media coverage will make sure it happens.

      • 15 years of monetary stimulus capped by 2 years of helicopter money drops, and you're going to get a recession. It doesn't matter how you talk about it. This is happening, and it's going to get a lot worse before it gets better.

  • It's more post-Covid than about the recession (Score:4, Informative)

    by Dutch Gun ( 899105 ) on Thursday July 07, 2022 @12:26PM (#62681430)

    Over my career in videogames, I've managed several recessions without much effect, and have not noticed large surges in layoffs. Nothing is "recession-proof", as the article mentions, but I'd posit that the industry could be described as "recession-resistant".

    I'd attribute this to the fact that videogames are a fairly cost-effective entertainment per hour, when compared to many other forms of entertainment. A sixty-dollar console game may last you eight hours of entertainment at worst, and up to hundreds of hours of entertainment at best. And there are affordable options available for second-hand games or rental services, or cheaper older or indie games on PC. So you might hold off on that big vacation, but there's not as much pressure to avoid picking up a new game, especially if you already own the required hardware to play it.

    The difficulty in acquiring the new generation consoles also show that it's supply, not demand that's currently the limiting factor of some areas of growth.

    So, the industry *may* see some reduction over the next year, but historically, it's stayed relatively strong even during general recessions. It's such a volatile industry anyhow, most of the times I've seen mass layoffs had little to do with the state of the general economy. It was just business as usual for us. And the opening of post-lockdown life may have more to do with this, as people are more anxious to get outside and away from their TVs and computer monitors for a time.

    I guess those of us in this industry will just have to see. But I'm still getting e-mails from recruiters with serious offers (in my particular programming specialty) several times a month from well known studios, so honestly, I'm not all that concerned for myself at least. Hopefully it doesn't trend any worse than predicted.

    • Maybe it's time to look at the bigger picture. The overwhelming people here will scoff at the travails of the crypto bros. Good riddance. But now we have news about the decline of PC sales, both mobile and desktop. Not so good. Non-gamers like myself might welcome the fall in video game sales. But the overall impact of all these declines cannot be good.

  • Idle thoughts on the industry... (Score:4, Insightful)

    by Petersko ( 564140 ) on Thursday July 07, 2022 @12:35PM (#62681446)

    Amazing, isn't it? An entire industry composed of artists, technicians, salespeople, management, accountants, etc. etc., drawing on educational programs that exist primarily to feed those positions... all directed at a single goal - consuming the free time of the general population.

    There is no feedback loop whereby society improves or is aided by this industry, unless you count keeping bored people from floating around aimlessly and being directly radicalized... it's a massive time sink from top to bottom, serving nothing except the consumption of unused capacity for no collective gain.

    The fact that this industry exists on this scale is a testament to how damn good the world has it in general.

    • Re: (Score:2)

      by splutty ( 43475 )

      Why are you talking about the advertisement industry?

    • Civilization has absolutely no use for 60% of the population. If you don't keep the morons entertained, they will cause trouble.

      • That's a wonderfully succinct summary. I like it.

        Youtube is littered with videos of what unemployed men in their twenties do in Eastern Europe. And those are just the harmless things (well, harmless to others).

    • Gaming has been driving computer advancement for years. Miniaturization, power, to portability. Don't even get me started on UX design. There's a reason pilots fly drones with xbox controllers and even curmudgeons like yourself can operate the different ATM interfaces without a young person holding your hand.

      • "...curmudgeons like yourself can operate the different ATM interfaces without a young person holding your hand"

        You would probably be surprised at the amount of grey hair behind those ATM interfaces. As for your assumptions about me, I've been coding for 40 years, and I'm surrounded by current tech.

    • I mean, you could make those statements about a whole lot of things. Some of them masquerading as doing something useful, like Finance.

    • And what would you have them do instead oh great 6-digit UID holder?
      /s

      I'd much rather have someone playing a videogame to unwind than allowing them to build up stress to the point of mental breakdown. In that regard, the videogame industry does have a benefit to society, just like the TV, Movie, Music, Writing, Arts, etc. industries: They give society a way to enjoy themselves and deal with their lives hardships. If that's not enough of a reason for them to exist in your view, I'd say you have a very poor
  • I'm sure it has nothing to do with the constant flow of derivative, repetitive, recycled, un-imaginative, trashy games. The metaverse will bring the new golden age of gaming - yea, that's the ticket!

  • These COVID sales increases were temporary boosts due to the odd circumstances, and any company that really thought the increased sales would be permanent was being short-sighted and out of touch with reality.

    If anything? I would expect an initial dip in sales that's greater than what it will level back out to, simply because of all the people, post COVID, who want to get back out and do things like see concerts, stand-up comedy, movies in theaters, go bowling, go to a local fair, etc. They're trying to get

  • I've got enough cheap, great, enjoyable and not designed-to-milk-me games already to fill the next couple decades.

  • Considering that people still cannot get a PS5 or the latest xbox reliably, why would they be buying games for the latest console generation? The chip shortage is going to affect sales because people can't get the gaming platforms.

  • It seems like there were more creative and exciting games 10 years ago, including ones that everyone I knew was talking about. They seem to occur less frequently now. I don't honestly know of a single KILLER game beyond maybe Elden Rings from this year. 10-15 years ago, I felt overwhelmed by choices of so many good games and not enough to time to play them all, and all my coworkers and friends were talking about them. Today, I hear people talk about 1 or 2 games a year, tops. So there's a product gap,
    • Yeah yeah. 10 years from now someone will be saying "10 years ago..."

    • Re: (Score:2)

      by GoTeam ( 5042081 )
      You should play more EA games. Madden Mobile is a thought provoking, artfully crafted, comprehensive treatise on the dangers of modern consumerism. The micro-transactions only help to complete the immersive experience. You can really feel the love EA has for their loyal customers. /s

      Elden Ring was a nice reminder that attention to detail by developers creates an enjoyable experience for the customers (even when getting your face smashed in by the same boss over and over for a couple hours).
    • *Horizon Zero Dawn has entered the chat*

      Say what now?

    • It seems like there were more creative and exciting games 10 years ago, including ones that everyone I knew was talking about. They seem to occur less frequently now. I don't honestly know of a single KILLER game beyond maybe Elden Rings from this year. 10-15 years ago, I felt overwhelmed by choices of so many good games and not enough to time to play them all, and all my coworkers and friends were talking about them. Today, I hear people talk about 1 or 2 games a year, tops. So there's a product gap, just like we've seen in movies. Don't get me wrong, they're out there, just maybe 1/2 to 1/3 as much.

      Could it be that you're simply less connected to the "scene" than you were 10 years ago? No, of course not, its the children who are wrong...

      • It seems like there were more creative and exciting games 10 years ago...

        Could it be that you're simply less connected to the "scene" than you were 10 years ago? No, of course not, its the children who are wrong...

        There's room for both of you to be right.

        The late 2000s / early 2010s had a number of good games, but it was also right around the time that DLC packs were pretty much the sole means of post-sale monetization. There were single player games and multiplayer games and some games had a mix of both. While there has always been a selection of below-average games (movie tie-in games were reliably bad for a while), the top half of games tended to involve interesting stories and replay value.

        Then, publishers starte

  • The largest gaming problem: runaway video card costs, which are now getting better.

    • Re: (Score:2)

      by Mal-2 ( 675116 )

      It wasn't the runaway costs, they were just a symptom. It was (and continues to be to a lesser extent) a shortage of parts that keeps prices high. Why should any manufacturer with suddenly limited volume want to use it on anything but the highest margin products? There is just enough TSMC to go around when things are humming along, but there isn't enough to deal with the backlog and continue new production.

  • you guys have phones, right?!

    Everything will be fine, we can just heavily monetize everything about every game! Need a bullet to fire at your enemy? $0.02 please...(per bullet, of course.) Want to repair your armor? $$$
    Move? $$$
    Look at the enemy? $$$

    What? You don't want to get everything for FREE do you, criminal?

  • we're saving money by playing some of those games we bought in the steam sales instead of buying new ones.

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